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williamtcooper
Community Member

Upwork's Financial Results and Forecasts for 2023

I just attended Upwork's Stockholders annual meeting for 2022 and their forecasts for 2023.

 

It was a very interesting meeting and below are my takeaways from the meeting in no specific order. Feel free to ask any questions.

 

- In 2023 40,000 Clients have signed up for longer term hiring on Upwork and 2,000,000 Freelancers.

 

- Upwork lost $89.9 million dollars in 2022 with a possibility of becoming profitable in the second half of 2023.

 

- The current focus is to generate more revenue from existing clients versus adding new clients in the first half of the year.

 

- Clients are taking longer to make purchasing decisions due to the macroeconomic conditions.

 

- Marketing spend will drop 12% in 2023.

 

- Companies are in Phase 1 of 3 phases of economics. In English - companies are scaling back and are cautious.

 

- Upwork is very excited about AI and stated that during the past 4 months AI posts are up 39 x!

 

- Upwork stated clients are purchasing from freelancers that produce their work using AI because it reduces client costs.

 

- Indirectly stated skilled freelancers are in more demand and less skilled in less demand.

 

- Upwork sees the first half of 2023 as challenging and the second half to be better based upon their enterprise sales team.

 

My takeaway is that freelancers need to be incorporating AI and expert level Skills or risk being less in demand. Expect the first half of this year to be slower due to the economy. AI and the economy have taken the show for the next six months.

 

This is a recently written Post with the SECRETS to growing your Upwork Sales at:

https://community.upwork.com/t5/Coffee-Break/THE-Secrets-to-Growing-Your-Upwork-Sales/m-p/1229943#M5...

 

This is a recently written Post with the SECRETS to hiring freelancers on Upwork at:

https://community.upwork.com/t5/Clients/SECRETS-to-Growing-Your-Business-On-Upwork/m-p/1235553#M8984...

 

tech129.jpg

91 REPLIES 91
celgins
Community Member

William,

 

Very interesting and thanks for sharing the information.

 

  • Upwork lost $89.9 million dollars in 2022 with a possibility of becoming profitable in the second half of 2023.

 

This one is a bit strange to me. With the influx of freelancers and clients since the start-to-middle of the pandemic, I would think Upwork's 2022 numbers would break even or be in the black.

 

  • Upwork is very excited about AI and stated that during the past 4 months AI posts are up 39 x!
  • Upwork stated clients are purchasing from freelancers that produce their work using AI because it reduces client costs.

 

Was there a discussion about the specific types of AI posts or the type of AI work being sought? I'm wondering if more clients are requesting AI-driven engineering and tech solutions or AI-generated writing, data, and content production, etc.

Hi Clark,

 

Upwork has never been profitable, but hopefully by 2024 is my guess.

 

AI everything is going crazy whether on Upwork or other related sites. Yes tech solutions are hot. As a Marketing Sales expert, I have been getting all types of AI clients because everyone thinks they have the next hot AI service.

I think Upwork is in a good position to be profitable in 2024, but I guess we will see.

 

Back during my software engineering / application development days, I would have been deep into these AI/ML enhancements. I'm following it now, but I have only helped a few clients explore some human-machine interface, AI/ML, task and cognitive modeling, and data fusion through technical writing.

 

I may need to brush off the old development skills and get more involved. I don't see AI/ML getting weaker any time in the near future.

It will be worth your time to brush up on the old development AI / ML skills because it will be a goldmine for Expert developers with those skills.

Clark,

 

I am amazed at the number of freelancers wanting to know what has happened and is happening with Upwork that are ignoring this post that contains the information directly from the CEO. Instead are creating complaint posts.

Well, I think you and I both know the hard truths about that. A lot of folks will not spend time searching for and reading valuable posts, taking Academy Learning Paths and lessons, or delving into Upwork's financial and business operations. If they did, they would understand a lot of things much better, and the questions being asked in Upwork's Forums would be sliced in half.

 

I guess we are all apathetic when it comes to some things. But if you really want the knowledge or you really want to understand something, you would be willing to do the research. For a lot of freelancers, cold hard cash could be a motivating factor to do more reading and research, but many still don't.

caee3e56
Community Member

This is pure truth Clark

How do you think it will assist those freelancers to know that Upwork is super enthusiastic about the changes that are rapidly diminishing the opportunities for them on the platform?

 

Side note: I doubt freelancers looking for solutions to problems like having trouble getting hired anticipate that they'll find useful information about those issues in Coffee Break.

25005175
Community Member


Clark S wrote:

Was there a discussion about the specific types of AI posts or the type of AI work being sought? I'm wondering if more clients are requesting AI-driven engineering and tech solutions or AI-generated writing, data, and content production, etc.


There is very little AI in the physical engineering sector. As I alluded to in my post on the subject and one commenter further clarified, most of the tools are iterative generators that produce attribute- or path-optimized shapes, with no regard to their manufacturability. Most of the machine learning tools are used for feedback sensing in manufacturing processes, such as spaghetti detection for 3D printing, catching defects and spoilage. Others are used to do part analysis, such as the DFM analyser and sheet metal feature interpreter in Solidworks, and for shape indexing, such as Thangs' 3D geometry search function.

celgins
Community Member

I posted a message/question to your post on the subject.

 

I'm guessing Upwork is not the place where clients will be requesting any earth-shattering AI-driven engineering solutions. Like you said in your post, the 3D modeling and additive manufacturing software like Hyperganic are only available to commercial/research entities, and it will likely be that way for a while.

Clark, what is your favorite computer languages?

Back when I used to be an actual developer, ๐Ÿ˜‚ I really enjoyed C++ and Java. I'm REALLY dating myself, but my undergrad degree is in Computer Science, so I started with Pascal, Borland C, and Basic, and even dabbled with a little COBOL and some assembly languages. (I'm sure anyone under the age of 35 thinks I'm speaking in riddles now!)

 

I enjoyed those 3rd-gen languages because you were forced to be an actual developer who understood logic and the underlying hardware, etc. I'm not saying today's languages are "easy," but the 3rd-generation was the "golden age" in my opinion.

 

Around 1998, I realized I needed to switch to languages that better support web and web application development, and move away from those powerful languages like C and Java that were being used mostly in the engineering, medical and manufacturing industries.

 

Today, I really like PHP, Python, JavaScript, some ASP.NET {C#), and SQL, since I prefer SQL-based databases over No-SQL databases. I rarely build anything with these languages/scripting these days. Plus, I have heard many developers say that a scripting language is not a true programming language.

 

What about you?

25005175
Community Member

COBOL? So you are one of the few capable of fixing the databases used by the unemployment offices throughout the USA!

celgins
Community Member

๐Ÿ˜‚๐Ÿ˜‚And, believe it or not, used by a few smaller banks and medical care facilities throughout the USA!

6bfcdaf8
Community Member

Here's the dilemma, clients are demanding higher skilled people, upwork is pushing full time hire. Expert talent is not settling for a single clients full time job (and budget), they want to be independent and they want to focus on most complex problems.

Well, the full-time change is just the addition of the "Contract-to-Hire" tag/label. It uses the exact same conversion process that was already in effect, with the same conversion rate. It's truthfully just a marketing ploy to try to win customers who are spending their time on the Indeeds/ZipRecruiters/Glassdoors of the world.

Jonathan,

 

I thought it was absolutely brilliant for Upwork to target Enterprise clients and match to their Expert freelancers. Within the past 24 hours, I have already been asked to apply for 4 of these types of jobs and Upwork takes out 0% fees. Upwork seems to be serious about this endeavor. Upwork lost $89.9 million in 2022 so they need to up their marketing sales strategy.

I wondered about that label. Freelancers aren't employees. It sounds to me like they're trying to be both employment agency and freelance site...

Alper,

 

It depends on the freelancers skill set. The jobs for my skill set range from $300,000 to $500,000 annually, however most enterprise clients can only afford to pay for part-time, thereby opening up all kinds of opportunities for freelancers. I thought it was absolutely brilliant for Upwork to target Enterprise clients and match to their Expert freelancers. Within the past 24 hours, I have already been asked to apply for 4 of these types of jobs and Upwork takes out 0% fees. Upwork seems to be serious about this endeavor.

25005175
Community Member

William, you should check your photo's maths before posting. This lower simplification in this section is wrong.

25005175_0-1676632861366.png

That step should have been [a^(3/3) * a^(1/3)]^(1/3), eventually simplifying to a^(4/9).

Too funny ๐Ÿ˜

๐Ÿคฃ๐Ÿคฃ

tlsanders
Community Member

The contradictions are interesting--clients are looking to cut costs with lower quality AI content content so they can save money, but higher skilled (and thus more expensive) freelancers are more in demand? 

Both can be true. I think it'll be the intermediate-level freelancers who'll struggle the most, not the entry-level ones who can compete on price. AI can't replace people who have years and years of experience and can advise, strategize, plan and be creative, as opposed to people who can merely execute a task (however talented they may be). There's such a shortage of experienced workers in the UK that the government is actively trying to persuade boomers to come out of retirement, since Gen-Xers like myself are a comparatively small percentage of the population and can't replace all the retirees. I'm not worried about having lots of good opportunities in the near future... just maybe not via Upwork, if current trends continue.

andrew_croft
Community Member

Ah, so now I see why the new shill bidding crap being added to bid on projects... Upwork is in financial trouble and we're all paying for their mistakes. Now clients will only see the top three people who were willing to throw their money at Upwork to bid on a project, rather than seeing a good cross-section of freelancers to choose from. Does Upwork notify clients that they are now being funnelled into seeing only those idiots who throw their money at projects, rather than provide high quality work in a proven portfolio? Have now spent 3x the amount on credits in the first two weeks of February with only one additional $200 project. The response is now so unbelievably pathetic it is no longer worth using Upwork - it is no longer a relevant source of work. i could never keep a client on Upwork, one project and then they said they would never use it again, ever. Some are now valued clients of mine. And then Ai... ok here's what I have on Ai... a client of mine from five years ago off Upwork contacted me a few months ago to completely overhaul all of their marketing, possibly driving their marketing for the next 4-6 months, all because one of their CEOs put their site through Ai and it mistakenly thought they were a crypto-currency company. So,, yeah, you invest all your efforts in Ai and a get a logo that is an ill-informed mish-mash of 10,000 similarly-named companies from a pool of web crap and that's what you want? And has anyone see the news on Microsoft and just how pathetic Bing on Ai is? - completely laughable. Yes, Upwork, invest heavily in Ai, it's the future. Upwork is a race to the bottom. Always has been, always will be.

Upwork has always been in financial trouble. That wasn't new in 2022, or even in 2021 when they beta-tested the Boosting system.

Have you actually used the new Bing? Seeing as it is free to try, I don't see why you would rely on "news" (read: bias/propaganda) articles to formulate your opinion.

I love the new AI tools such as ChatGPT since they tend to augment work and give ideas and concepts. The tool is not perfect, but conceptually solid.

 

I read in The Economist magazine that 100 million people are now using ChatGPT.

 

There is absolutely no doubt in my mind that once ChatGPT-5 comes into play that most of the entry and intermediate jobs will be in much less demand and Experts will be the rage. It's occuring already on this site with ChatGPT-3.5.

I actually applied to a job the other week that had numerous increased bids without increasing mine (like you, I don't like that concept)...and I got the job. 

6bfcdaf8
Community Member

If you follow job posts on upwork, you'll quickly notice some fraction of those are buzzword hype posts. These are easily excited people looking to be the first or profit from a hype which the dont have much in-depth knowledge about.

 

once it was onlyfans clone when they heard of was going to ban nsfw content, and some other time it was crypto bots to make faster than everyone trades and some other time it was launching nfts or coins. Now its ai.

 

So theres "interest" in ai because its hyped. It doesnt directly mean there's money in ai related jobs on upwork. Actually its probably the opposite.

Alper,

 

The new AI tools are real and extremely helpful. I am a micro influencer on LinkedIn (36,000 CEOs Followers) and other Upwork competing sites and the amount of AI related work is exploding. The CEO of Upwork and the financial analysts on Wallstreet comments on AI is only a comfirmation of I what I have been experiencing for the past three months.

 

Real examples of projects I have been on in the past three months include using AI for fintech, SaaS. computer coding, sales copywriting, articles, social media idea creation, etc. etc. Most of the 40+ projects I have been hired for on Upwork in the past 3 months involved some sort of AI with Expert industry and skill knowledge.

 

It is extremely clear from my direct client experience that by the time ChatGPT-5 arrives that many of the entry and intermediate jobs will be in less demand and Expert work will explode. It is already occuring on Upwork; just view all the compliants about freelancers stating that they are receiving little to no new client jobs.

Thanks for sharing your experience, theres no way i can argue with what you see. Yet i filter out all buzzwords to find actual job posts in the haystack. I believe quickesr way to ruin your profile is to take jobs with the title "need an ai expert asap"

You are right about on Upwork that there is not much left in the job postings for real AI jobs.

 

The AI posts are coming to me directly via Invites (160 so far in 2023, Talent Scouts, and Consultations). 

 

Many of the clients realize that they need an industry and skill Expert that knows about AI and how to specifically apply to their exact situation. They are bypassing open posts, but instead going directly to the Experts. It is a major reason along with the weak maco economic conditions that there are hundreds of freelancers complaining of not receiving any or few job offers this year. 

8467c28e
Community Member

It's clear that Upwork has made significant progress over the past year, despite the economic challenges posed by the pandemic. The fact that 40,000 clients have signed up for longer-term hiring on Upwork is a testament to the value that the platform provides to businesses seeking skilled freelance talent. Additionally, the increase in AI adoption by freelancers on the platform is a promising development that reflects Upwork's commitment to staying at the forefront of technological innovation.

 

It's also encouraging to hear that Upwork is taking a strategic approach to generating revenue from existing clients, as this shows that they are focused on building long-term relationships with their customers. While the first half of 2023 may be challenging, it's clear that Upwork has a strong enterprise sales team and a plan in place to weather the economic uncertainty.

 

Overall, I believe that Upwork has a very promising future. The fact that they are constantly innovating and adapting to changing market conditions bodes well for their long-term success. As the demand for skilled freelance talent continues to grow, Upwork is well-positioned to meet the needs of businesses and freelancers alike. I'm excited to see what the future holds for this innovative platform!

What do you think the future holds for the Entry level Skilled?

The future for entry-level skilled workers in the freelance market could be both promising and challenging. On one hand, the demand for freelance talent is expected to continue to grow, driven in part by the shift towards remote work and the rise of the gig economy. This could create more opportunities for entry-level skilled workers to showcase their skills and build their portfolios.

 

However, the competition in the freelance market can be intense, especially for entry-level workers who are still building their reputation and portfolio. In addition, the pandemic has brought economic uncertainty that may impact the job market and freelance opportunities.

 

To succeed in the freelance market, entry-level skilled workers will need to focus on developing their skills, building their portfolio, and establishing their reputation. They may also need to be flexible and adaptable in their work and pricing to remain competitive in the market.

 

Platforms like Upwork can be helpful for entry-level skilled workers by providing access to a large pool of potential clients and offering tools to showcase their skills and build their reputation. Upwork also offers educational resources and support for freelancers, which can be especially valuable for those who are just starting out in the freelance market.

 

While the future for entry-level skilled workers in the freelance market may present some challenges, there are also opportunities for those who are willing to work hard, develop their skills, and remain adaptable in the face of changing market conditions.

Utku,

 

My takeaway from the annual meeting is that Entry level and Intermediate jobs will be in less demand which can be seen by viewing all of the "I can't find a job on Upwork" complaints in the Community. It's already happening.

 

AI is enhancing the accuracy and speed of the Experts, therefore making them less costly to clients.

Hi William,

 

This is absolutely true. So in the short term, AI will disable lower and mid-tier talent. But the top talent will continue to win.

 

However, there is a situation, which I observe that most people either don't see or ignore, that freelancers with lower and mid-tier skills who will no longer get jobs can develop skills on how to use AI tools ๐Ÿ™‚

 

In this case, the question may arise; okay, but learning how to use AI is not a skill!

 

This is a big misconception. Because this will soon become a real skill. Prompt specialization and Prompt engineering, which have already started to rise, have started to give signs in this regard. On the platforms on the internet, you can come across job postings such as ChatGPT expert wanted, Prompt expert wanted etc.

 

In other words, those who are afraid of losing their jobs because of the emergence of AI can already get ahead of others if they are quick on their feet in the specialization of using AI.

 

And the big news is that while AI can end many jobs, it can also create more jobs than it ends ๐Ÿ™‚

Utku,

 

If there are 100 programmers and now 10 programmers can do the work of 100, 90 programmers lose their jobs. This is already happening in many professions. The 90 programmers come to Upwork, however because clients are laying off programmers, clients don't need programmers from Upwork unless it is at an Expert level in a unique in-demand field.

 

It's a massive net loss of jobs by the end of this decade.

 

AI takes the white collar jobs and robotics will take the blue collar jobs.

 

During the 100 year industrial revolution, 80% of the people were farmers and today 6%. That was a loss of farm jobs to new white collar and blue collar jobs. There are no other category of jobs to go to and this change will take 10 years not 100 to 200 years to occur. People can't absorb change at the rate of an AI computer and a robot.

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